The All Ordinaries Index (ASX: XAO) is down 0.25% in early afternoon trade. But that’s not holding back this ASX All Ordinaries share. It’s rocketed a whopping 43% since the opening bell this morning.

Any guesses who?

If you said New Century Resources Ltd (ASX: NCZ), give yourself a gold star.

The mining company is shooting the lights out today following news of an off-market takeover offer.

What’s the takeover offer for the ASX All Ordinaries share?

Large-cap miner Sibanye Stillwater Ltd (NYSE: SBSW) has announced an off-market takeover offer to acquire up to 100% of New Century Resources, valuing the miner at $1.10 per share.

That, not coincidentally, is right about where the ASX All Ordinaries share is trading at the time of writing.

With an existing interest of 19.9%, Sibanye Stillwater is the largest shareholder in New Century Resources.

The company said it participated in New Century Resources’ December 2021 equity capital raising because that aligned with its strategy to increase its tailings retreatment and recycling presence globally.

At the time of the acquisition, Sibanye Stillwater’s CEO Neal Froneman said, “We look forward to supporting New Century to build a leading global tailings retreatment business, uniquely positioned to play a key role in green metal supply chains.”

Now, more than two years on, Sibanye Stillwater said it’s “concerned about the change in the strategic direction of New Century under current management”, adding that management has lost its focus on building a tailings asset management services business.

Citing the 59% six-month drop in the ASX All Ordinaries share (excluding today’s big increase) Sibanye Stillwater said the current strategy “has not been well received by shareholders and investors”.

It also did not support the proposed re-election of Nick Cernotta or Robert McDonald to the board at the Annual General Meeting on 9 November.

Sibanye Stillwater also aired its concerns about New Century’s balance sheet, saying the ASX All Ordinaries share might need to raise more funds, “which could result in a material dilution for existing New Century shareholders”.

The company set its offer price of $1.10 per share, in the absence of a competing proposal.

New Century Resources share price snapshot

As you can see in the chart below, the ASX All Ordinaries share remains well down over the past 12 months but, with today’s big boost factored in, is up 29% so far in 2023.

The post Guess which ASX All Ordinaries share just rocketed 43% on takeover news appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Best & Less Group Holdings Ltd (ASX: BST) share price has jumped 10% after the discount apparel retailer reported its FY23 half-year result.

This huge gain compares to the S&P/ASX 200 Index (ASX: XJO) decline of around 0.5%.

The Best & Less share price opened higher at $1.72 and continued to rise through the morning.

Best & Less share price jumps despite tricky first half

Here are some of the highlights for the 26 weeks to 1 January 2023:

• Total revenue grew 13% to $324.8 million
• Pro forma/underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $22.1 million generated
• Pro forma/underlying net profit after tax (NPAT) of $13.7 million generated
• Net cash position of $14.7 million
• Interim dividend per share of 8 cents

The retailer explained that there was weaker consumer demand in the first half, so it reduced prices in key volume lines, which impacted its gross profit margin (which was 47.1% in the first half).

Despite that, the average sales price (ASP) was 9.5% higher than the prior corresponding period.

What else happened in the first half?

The company has been laying the foundations for the next phase of its growth while managing the impacts of the global supply chain uncertainty and inflationary environment.

Best & Less said it’s now focused on a number of growth priorities, including market share growth in baby, kids and womenswear, achieving above-market online sales growth, improving its store network and transforming its supply chain.

The business is expecting to open six new stores in the second half. It will have over 250 stores across Australia and New Zealand by the end of FY23.

Best & Less is still searching for a new permanent CEO, with the process “progressing well”. Jason Murray will remain as executive chair until a new CEO starts in the role.

What did management say?

The Best & Less executive Chair Jason Murray said:

While trading conditions were inconsistent in the first half, our team remained committed to delivering exceptional value and service for our customers. Our core non-discretionary and baby product lines continued to perform well, reflecting the strength of our differentiated value proposition of ‘twice the quality at half the price.’

Trading update

In the first seven weeks of trading in the FY23 second half, total sales were up 3.8%, with like-for-like sales growth of 3.9%. Sales growth can be helpful for the Best & Less share price. Like-for-like store sales growth was 7%, while online sales were down 23%.

Consumer shopping behaviour “continues to normalise”, with in-store traffic increasing. The supply chain stability is also improving. The company said its inventory position is “well positioned.”

It didn’t change its previous guidance which suggested that, assuming no material deterioration in economic conditions that impacts sales, it’s expecting to deliver a second-half underlying/pro forma NPAT of between $18 million to $20 million. That compared to $21.4 million in the second half of FY22, which included $1.6 million of NPAT from a 27^th trading week in that half.

Best & Less share price snapshot

While it is up strongly today, the share price is down around 50% since 22 February 2022.

The post Best & Less share price soars 10% on result, improving outlook appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The CSL Limited (ASX: CSL) share price is trading lower on Tuesday afternoon.

At the time of writing, the biotherapeutics giant’s shares are down slightly to $298.06.

What’s going on with the CSL share price?

The CSL share price is trading slightly lower today amid broad market weakness.

This weakness appears to have offset the release of a positive announcement relating to CSL’s product portfolio.

According to the release, the European Commission has granted conditional marketing authorisation for HEMGENIX (etranacogene dezaparvovec).

This is for the first gene therapy option for the treatment of severe and moderately severe Hemophilia B (congenital Factor IX deficiency) in adults without a history of Factor IX inhibitors by a single infusion.

This follows approval by the US Food and Drug Administration for HEMGENIX for the same indications in November.

But wait there’s more…

Another positive that CSL has announced relates to the garadacimab or CSL312 therapy, which is currently undergoing phase 3 clinical trials.

Garadacimab is CSL’s investigational monoclonal antibody that is being developed as a long-term prophylactic treatment for patients with hereditary angioedema (HAE).

The good news is that results from the trial, the first to investigate targeting activated Factor XII (FXIIa) to prevent HAE attacks, showed that once-monthly subcutaneous injections significantly reduced the attack rate compared to placebo.

Based on these results, CSL will proceed with regulatory submissions to global health authorities later this calendar year for full approval of garadacimab.

This could be a very big positive for CSL’s future. Goldman Sachs has recently suggested that garadacimab could end up being a “pipeline in a product” thanks to multiple end use possibilities. It commented:

CSL312 is a humanised anti-factor XIIa monoclonal antibody in development for multiple indications including as a subcutaneous therapy for HAE, with the potential for administration every 4 weeks (vs. every 2-3 days for Haegarda). Given its early position in the coagulation cascade, there is also potential application in various other disorders (including fibrosis, cardiovascular and inflammatory indications).

The post CSL share price lower despite portfolio update appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Gaining a second income from ASX shares is a relatively easy concept to get one’s head around. Many ASX shares pay dividends. Dividends are cash payments made to the shareholders of the company, from the company. They can be an important source of income for anyone seeking passive cash flow.

But getting to a point where ASX shares can pay you a yearly income of $20,570 or more is the hard part.

Let’s take an ASX index fund like the Vanguard Australian Shares Index ETF (ASX: VAS). This exchange-traded fund (ETF) holds a broad swathe of the Australian share market, investing in the largest 300 shares listed on the ASX.

That’s everything from Commonwealth Bank of Australia (ASX: CBA) to Telstra Group Ltd (ASX: TLS) and Harvey Norman Holdings Limited (ASX: HVN).

This index fund holds dozens and dozens of dividend-paying shares. As such, it can pass any dividends it receives straight through to its investors.

Over the past 12 months, this ETF has paid out a total of $6.26 in dividend distributions per unit. At the current pricing, that gives this fund a trailing distribution yield of 7.04%.

So say that an investor bought this ETF at the current pricing a year ago. They would have received just over $7 in passive income for every $100 invested.

But how much would said investor need to have in this ETF to gain a second income of $20,570 over the past 12 months?

How long does it take to build a second income from ASX shares?

At that 7% yield, it would have taken a lump sum of just over $292,200 to generate $20,570 in passive dividend income.

Now, that might seem like a lot (and it is). But here’s how consistent investing could get you there.

The Vanguard Australian Shares Index ETF has generated an average return of 9.21% per annum since its inception back in 2009. That’s assuming all dividend distributions are reinvested.

So let’s assume this rate of return continues (which is never guaranteed). At this return, an investor would get to $292,200 if they invested $1,000 per month for just over 13 years. And reinvested all dividend distributions, of course.

If our investor was able to up the ante and invest $1,500 per month, this would cut our timeframe down to 10 years. Then, you can stop reinvesting those dividends and hopefully enjoy at least $20,570 every year in passive income.

Gaining a second income from ASX shares takes a lot of time, money, and discipline. But it can be done.

The post How I’d invest $200 in ASX 300 shares each month to target a $20,570 second income appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Telstra Group and Vanguard Australian Shares Index ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Harvey Norman. The Motley Fool Australia has positions in and has recommended Harvey Norman and Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Johns Lyng Group Ltd (ASX: JLG) is the best-performing ASX 200 share on the market so far today.

This follows the release of the integrated building services company’s 1H FY23 results this morning.

The Johns Lyng share price opened at $6.01, up 7.3% on yesterday’s close. It ascended to an intraday high of $6.51 about an hour after the market open. It is now trading at $6.48, up 15.7% for the day.

By comparison, the S&P/ASX 200 Index (ASX: XJO) is down 0.6% today.

The company’s results included an 11% upgrade to forecast revenue and a 5.5% upgrade to forecast earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the full-year FY23.

The company now expects $1.146 billion in revenue and $111.1 million in EBITDA for FY23.

Why are Johns Lyng shares leading the ASX 200 today?

Here is what the company reported for the six months ending 31 December 2022:

• Sales revenue of $635.6 million, up 71% on the prior corresponding period of 1H FY22 (pcp)
• EBITDA of $59.4 million, up 63% pcp
• Net profit after tax (NPAT) of $34.1 million, up 84% pcp
• Earnings per share (EPS) of 9.68 cents, up 88% pcp
• Fully franked interim dividend of 4.5 cents per share, up 67% pcp

Johns Lyng will pay its interim dividend to shareholders on 14 March.

What else happened in FY22?

Johns Lyng said “a record volume of business as usual (BaU) and catastrophe (CAT) work” drove its strong earnings growth and forecast upgrades.

In its statement, the company said:

The depth of our relationships with our insurance counterparties and the growth in our Strata
network underpins the future growth prospects of the IB&RS [insurance building and restoration services] division.

The results are even more impressive when you consider they exclude commercial construction, which the company has chosen to scale back so it can focus on large insurance building projects.

Johns Lyng’s acquisition of United States company Reconstruction Experts in January 2022 bore its first fruit during the half, contributing to the company’s boosted CAT revenues.

Reconstruction Experts focuses on insurance-related repairs to residential, commercial, and industrial properties. During the half, it helped residents affected by Hurricane Ian.

Johns Lyng ascended from the S&P/ASX 300 Index (ASX: XKO) to the ASX 200 during the half.

The company now has a market capitalisation of $1.46 billion.

What did management say?

Group CEO Scott Didier AM said:

These results demonstrate the robustness of our business model and give us the confidence to
upgrade forecast Group Sales Revenue to $1.146 billion and EBITDA to $111.1 million.

We are seeing a continuing and growing trend in our CAT business whereby the value and
duration of these events continue to increase and have a multi-period and indeed multi-year impact
on our business.

Although the financial contribution from CAT events is pleasing and growing, the bedrock of JLG’s
earnings is our IB&RS BaU work.

These earnings have an annuity style profile, and we see significant further growth as we build out our footprint and leverage our service offerings — particularly in our expanding Strata business.

Recent history of this ASX 200 share

The Johns Lyng share price is up 9.6% in the year to date compared to a 5.3% bump for the ASX 200.

Over the past 12 months, this ASX 200 share has fallen 14.5% compared to a rise of 1.1% for the index.

The post Guess which ASX 200 share is surging 16% following a revenue upgrade appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Johns Lyng Group. The Motley Fool Australia has recommended Johns Lyng Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 300 Index (ASX: XKO) might be down in the dumps today, but shares in these constituent companies are soaring higher after they posted first-half earnings.

Right now, the index is 0.46% lower at 7.317.6 points.

2 ASX 300 shares jumping on first-half earnings

First up, shares in Judo Capital Holdings Ltd (ASX: JDO) are leaping higher today after the ASX 300 bank revealed a 322% increase in pre-tax profits for the first half, coming in at $53.2 million compared to $12.6 million in the prior period.

The stock reached an intraday high of $1.60 on Tuesday – an 11.1% gain.

The small-to-medium businesses-focused lender also revealed a 3.56% underlying net interest margin – a 72 basis points improvement.

Meanwhile, its gross loans and advances lifted 23% to $7.5 billion and its net interest income soared 69% to $163 million.

Judo CEO and co-founder Joseph Healy dubbed the outcome “another black belt result”, continuing:

We remain on track to achieve our FY23 guidance and our key business metrics at scale.

With a low ratio of customers per banker, we understand our customers in a way that other banks simply can’t replicate. This provides our business with a strategic hedge that will enable our business to continue growing regardless of the operating environment.

Joining the bank share in the green is ASX 300 mining services group Perenti Ltd (ASX: PRN). Its share price peaked at $1.225 today – a 7.9% gain.

The company posted $1.4 billion of revenue for the first half of financial year 2023 – a 20.6% year-on-year increase.

Earnings before interest, tax, depreciation, and amortisation (EBITDA) also lifted 39% to $281.2 million and net profit after tax (NPAT) rose 75% to $61 million.

Perenti upgraded its full-year guidance on the back of the strong half. It now expects to post between $2.8 billion and$2.9 billion of revenue and between $250 million and $265 million of earnings before interest and tax for financial year 2023.

The post 2 ASX 300 shares making big gains on results announcements appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Judo Capital. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The NIB Holdings Limited (ASX: NHF) share price is rebounding on Tuesday after a selloff yesterday.

At the time of writing, the private health insurer’s shares are up 3.5% to $7.26.

Why is the NIB share price charging higher?

Investors have been bidding the NIB share price higher today after a leading broker suggested that Monday’s weakness was a buying opportunity.

According to a note out of Citi, its analysts have upgraded NIB’s shares to a buy rating with a $7.85 price target.

Based on where its shares are currently trading, this implies potential upside of 8.1% for investors over the next 12 months.

Citi also now expects a fully franked 28 cents per share dividend in FY 2023, which equates to a 3.9% yield, boosting the total potential return to approximately 12%.

While Citi acknowledges that NIB’s first-half result was below expectations, it remains positive due to its above-system growth in the core ARHI segment.

What else are brokers saying?

Elsewhere, the team at Ord Minnett has also upgraded NIB’s shares. Albeit to a hold rating with a $7.00 price target.

Finally, over at Morgans, its analysts have retained their hold rating with a reduced price target of $7.55. It saw positives and negatives from the result. The broker commented:

We would summarise this result as a headline miss, with the lower than expected ARHI net margin (8.6% versus 10.6% in the pcp) raising some concerns about the potential speed of future profit normalisation in this business. But, we think those concerns shouldn’t completely overshadow what was a sound 1H23 underlying business performance, highlighted by 9%-13% revenue and NPAT growth on the pcp respectively.

The post Is the NIB share price a bargain buy following Monday’s dive? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended NIB Holdings. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Earnings for this healthcare giant were slashed by a colossal 54% in the first half, yet I’m hungrier than ever for more Sonic Healthcare Ltd (ASX: SHL) shares.

On Thursday, shares in the laboratory, pathology, and radiology services provider blasted 14.2% higher despite revenue and profits cratering. On top of that, the figures presented missed consensus estimates by 1%.

So, why on earth would I be wanting to increase my stake in Sonic Healthcare now?

At present, the company holds a 1% weight in my portfolio. Ideally, I’d now like to grow that position to between 2% to 3%… and here’s my reasoning.

The COVID comedown

It’s no secret that COVID-19 testing provided a temporary tailwind to Sonic’s top and bottom lines. We are now seeing that fade away as we return to our ‘new normal’. The diminishing COVID revenues have been an anchor on the Sonic Healthcare share price over the past year.

This might be unnerving for some shareholders. However, I take solace in the fact the core business is now fundamentally stronger than it was prior to the PCR testing frenzy.

As noted in its first-half results, Sonic’s ‘base business revenue’ — comprising of laboratory, pathology, radiology, etc. revenue excluding COVID-19 testing — increased by 9% compared to the prior corresponding period to $3.7 billion.

Prior to 2020, the company had been growing its top line at around 10% per annum on average. I think there is an underappreciation for this base revenue. While it’s not a trendy new industry, the diagnostic services market is incredibly large and estimated to grow at a compound annual growth rate (CAGR) of 13% out to 2030.

Where will Sonic Healthcare find growth?

I believe Sonic Healthcare will be able to sustain its 10% revenue growth by expanding into higher value — and possibly more in-demand — areas of diagnostics such as genetic, microbiome, and molecular diagnostics.

Molecular diagnostics

Speaking of molecular diagnostics: this is an area of diagnostics that Ark Invest highlighted in its Big Ideas 2023 report.

Analysts at Ark estimate the total addressable market for this type of diagnostic testing for cancer alone could be US$95 billion. Likewise, annual revenue derived from this form of testing is forecast to grow above 20% per annum through 2030 and beyond.

My guess is this played a key role in Sonic’s decision to acquire ProPath in 2021. ProPath is a specialist in molecular pathology, serving 1,000 physicians and more than 20 hospital groups in the United States.

Hence, the addition of ProPath taps into the potential growth engine of molecular diagnostics — enabling a path for more upside in Sonic Healthcare shares.

Aging population

In my opinion, Sonic Healthcare could also grow faster for longer than most investors think due to an aging population. As people live longer as a byproduct of medical advancements, the rate of occurrence of cancers could trend higher.

As pictured above, the burden of cancer is estimated to increase by more than 60% from 2018 to 29.4 million new cases globally in 2040. In turn, I believe the demand for genetic predisposition testing, diagnosis, and prognosis of cancers will similarly expand over the next two decades.

There was an early indicator of the high growth rate in this market within Sonic’s half-year presentation. In the US, revenue growth from ThyroSeq (thyroid cancer genetic test) was above 25%.

The potential reacceleration of earnings growth from this structural tailwind plays a significant role in my desire to buy more Sonic Healthcare shares.

What else is appealing about Sonic Healthcare shares?

There are a few others reasons why I personally see more upside to this global healthcare giant. To avoid this article becoming more of a novel, I’ll list these additional positive factors below:

• Despite COVID-19 testing revenue diminishing, molecular testing for various viruses will undoubtedly persist in the future.
• The company is positioned for further inorganic growth as management utilised COVID-19 profits to deleverage its balance sheet.
• Plenty of runway for increased dividends or more buybacks

Lastly, my ultra bull case for Sonic Healthcare shares is centred around where value will accumulate along the value chain in the future.

I believe there is potential for laboratory testing to absorb a greater proportion of attributed value as the industry pivots to a preventive approach, rather than reactive. Greater margins could be recognised by the likes of Sonic as a result.

This is quite a speculative assumption. Realistically, such a scenario is purely the ‘cream on top’ of my investment thesis.

The post Why I’m more eager than ever to buy Sonic Healthcare shares following earnings appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler has positions in Sonic Healthcare. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Sonic Healthcare. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The BHP Group Ltd (ASX: BHP) dividend isn’t quite what it was this time last year.

This morning, the S&P/ASX 200 Index (ASX: XJO) listed mining giant reported its half-year results for the six months ending 31 December (1H FY23)

Those results showed the miner is still making hay, with revenue of US$25.7 billion and profits after tax of US$6.5 billion.

Yet year on year the results were significantly lower, with revenue down 16% from 1H FY22 and profits down 32%.

What about the BHP dividend?

As you’d expect, the lower profits led to a lower dividend payout.

The BHP board declared an interim, fully franked dividend of 90 US cents. That’s down 40% from the US$1.50 interim dividend paid out last year.

The current 90 cents per share payment works out to a total return to shareholders of US$4.6 billion and a 69% payout ratio.

The record date for the dividend payout is 10 March 2023 with payment due on 30 March.

Eligible shareholders wanting to participate in BHP’s dividend reinvestment plan (DRP) need to do so by 13 March.

Investors appear underwhelmed with the results. In late morning trade, shares in the ASX 200 miner are down 2%.

As my Fool colleague James Mickleboro pointed out this morning, “BHP has beaten Goldman’s dividend estimate of 88 US cents per share, but it has fallen short of the consensus estimate of 98 US cents per share.”

“Naturally, this will disappoint investors but it may not come as much of a surprise,” Josh Gilbert, market analyst at eToro said.

“BHP’s pending acquisition of Oz Minerals will be critical to future growth with the focus towards copper and nickel, two commodities that are a focal point in Australia’s clean-energy transition,” Gilbert added.

Copper is currently the second biggest revenue generator for the big miner.

The post The BHP dividend has been slashed by 40%. Here’s the lowdown appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Tabcorp Holdings Ltd (ASX: TAH) share price is up 4.5% on Tuesday morning.

Shares in the S&P/ASX 200 Index (ASX: XJO) gambling company closed yesterday trading for $1. Shares are currently changing hands for $1.05.

This comes following the release of Tabcorp’s half-year results for the six months ending 31 December (1H FY23).

Here are the highlights.

Tabcorp share price soars on revenue and earnings lift

• Revenue of $1.28 billion, up 11% from the $1.15 billion reported in 1H FY22
• Earnings before interest, taxes, depreciation and amortisation (EBITDA) of $197 million, up 24% compared to the 1H FY22 pro forma EBITDA
• Statutory net profit after tax (NPAT) of $52 million
• Operating expenses (OPEX) increased 4% year on year to $323 million
• Fully franked interim dividend of 1.3 cents per share declared, down from 6.5 cents per share in 1H FY22

What else happened during the half year?

Tabcorp credited the 24% increase in half-year EBITDA – a figure that looks to be boosting the share price this morning – to 58% growth in its cash wagering revenue. This followed on a strong rebound from the COVID-impacted earnings in 1H FY22 when restrictions on public gatherings remained in place.

The company noted its dividend payout ratio reflects 61% of NPAT before significant items and equity accounted loss.

The demerger from The Lottery Corporation was reported as “seamless” with the separation process remaining on track.

The half-year also saw the ASX 200 gambling company launch its new TAB App, alongside acquiring a 20% stake in online racing and sports bookmaker Dabble.

And Tabcorp improved its funding position, raising $425 million equivalent in debt from the US Private Placement market.

What did management say?

Commenting on the results sending the Tabcorp share price soaring today, CEO Adam Rytenskild said:

Today’s results highlight that our transformation strategy, which commenced on 1 June 2022, is working… The COVID lockdowns presented an opportunity for digital only operators, but our retail customers have quickly returned, and our digital transformation is amplifying that opportunity.

I’m particularly pleased that, with new entrants entering the market and retail venues reopening, TAB held digital revenue market share for the first time since 2019. To retain our market share, while a new entrant took share from competitors and retail reopened, highlights that customers are loving the new TAB App.

What’s next?

Looking ahead to what might impact the Tabcorp share price down the road, Rytenskild said the company is targeting 30% digital revenue market share by FY25, up from 25% currently.

The company is also aiming to cut its operating costs to between $600 million and $620 million in FY25.

As for the full 2023 financial year, Tabcorp upgraded its OPEX guidance to 2% to 3% growth on FY22 pro forma OPEX, from the prior 3% to 4% growth.

Its FY23 Capex guidance of $150 million and depreciation & amortisation guidance of $250 million to $260 million remained unchanged.

Tabcorp share price snapshot

As you can see in the chart below, the Tabcorp share price is now well into the green over the past 12 months, up just over 7%.

The post Tabcorp share price rocketing on strong post-COVID rebound results appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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